NHL locks players out; outlook dim

By Nancy Marrapese-Burrell, Globe Staff | September 16, 2004

NEW YORK -- National Hockey League commissioner Gary Bettman, painting a bleak picture of the league's economic state, yesterday locked out players from training camps, which were to open this week, and cast doubt on the prospects for a 2004-05 season because of severe differences with the league's Players' Association.

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Bettman's actions came hours before the league's collective bargaining agreement expired at midnight last night. That agreement had lasted 10 years since the NHL's last work stoppage -- 103 days that reduced the 1994-95 season to 48 games.

Bettman said that the league has lost $1.8 billion under the current agreement and that the league's operations will be shut down until the union acknowledges the crisis and works as a partner with the league to reach a solution.

"Twenty of our [30] clubs are losing money," said Bettman. "There have been too many bankruptcies and too many other close calls. I have had too many owners tell me they will get out of this game if the economics are not repaired. There is no short cut or quick fix. We need an enforceable, defined relationship between revenues and expenses. We need a system that will eliminate the disparities in payrolls so that a team's ability to compete depends on its team-building skills, not on its ability to pay." In other words, the league wants what has become a familiar issue in recent labor battles in pro sports: a salary cap (or some mechanism that ties payrolls to a percentage of revenues).

The NHLPA has consistently disputed the NHL's position. Executive director Bob Goodenow's assertions following Bettman's comments were as passionate as the commissioner's.

"An honest partnership can never be achieved under the league's `My-way-or-the-highway' approach," said Goodenow. "Partnerships are built on respect, trust and a willingness to compromise. Partnerships are not built through confrontation. Nonetheless, Gary and the owners have chosen, through a lockout, to try to force players to accept a system they know players would never agree to." The NHL, which says it spends 75 percent of its $2.1 billion in revenues on salary, is the last of the four major pro sports leagues without a salary cap or a luxury tax on high payrolls. The NFL and NBA have salary caps, and Major League Baseball won a hard-fought battle with its union two years ago for a luxury tax on teams that spend over a certain amount on payroll. The NBA cap, for example, limits salaries to approximately 48 percent of a team's basketball-related revenue.

Bettman said the league is both "out of gas and out of time," and that continuing to conduct its business the way it has been for the past decade would be catastrophic.

The league's last work stoppage lasted 103 days and there were many signs that this could go even longer. No negotiations are scheduled, and several of the league's top players, including Joe Thornton of the Bruins, have signed to play with European teams in case the season is canceled.

Both sides have said their respective proposals would solve what ails the league, but the NHL's popularity pales in comparison with the other three major pro sports -- football, baseball, and basketball.

The owners are insisting on cost certainty, and in July put forth six propositions aimed at bridging the gap. The union labeled each various forms of a salary cap. It countered with its own proposal -- that the league said is just a tweaking of the status quo.

"The status quo is an average salary of $1.8 million a year, a three-fold increase under this CBA," said Bettman, who added that owners want to drop the average salary to $1.3 million, for starters. "For most clubs, however, the status quo means millions in annual losses. For the league, it has meant bankruptcies in Buffalo, Ottawa, Pittsburgh, and Los Angeles. For the fans, it has meant high and increasing ticket prices, and the status quo has meant teams cannot meaningfully compete. It is a fact that during this CBA teams in the top one-third of salaries have been three times more likely to make the playoffs than a team in the bottom third. This is a status quo with which we can't continue to live." The owners' position is that they don't begrudge the players what they were able to earn under the last CBA, but they have no interest in continuing along the same path. Bettman said if it means canceling the entire season, so be it.

Bettman said he sent a letter to the union on March 19, 1999, saying he was alarmed at how drastically the NHL was losing money. He said he was worried that the system was broken and offered to open the league's financial books. The union declined the offer.

"As difficult as today is, the reality is we had no choice, in the face of the union's continued refusal to address the economic problems which are clear to everyone but them," said Bettman, who labeled the union's compromise a carbon copy of the proposal they put forth in June of last year.

"The union defined their marketplace with the most recent proposal, which it waited more than 15 months to deliver. When you look at the history, this a union leadership that only negotiates through confrontation, never looking forward to see what is needed or good for the game."

Bettman called the expired CBA a fatally flawed system that needs major retooling, and that the NHL clubs lose less money by not playing the season than they do by proceeding. The union strenuously disagrees. However, the owners -- who have built a $300 million war chest in anticipation of this lockout -- appear to be in the driver's seat. Legally, the NHL could force its new rules on the players if an impasse is declared and they could then decide to play or not, but Bettman said they have yet to address that option. He said he's still holding out hope the sides can hammer out a deal. However, the commissioner said the NHLPA will have to bend.

"It's time to move forward with a system that works for everyone," said Bettman. "This union does not seem to care about the problem, the game, or the fans. So the question is, why won't the union negotiate? This union's leadership seems to think its best hope is to let the players keep as much as they have and try to win a fight, hoping that the owners will give up. That will turn out to be a terrible error in judgment for the union."

Bruins president Harry Sinden, echoing the feelings of many, said he didn't have hope the sides could find a middle ground.

"The two principals are so diverse and are so far apart that they can't really negotiate, one wanting a cost certainty system and one not prepared to give it up at all," he said before the lockout was announced. "You get nowhere."